Friday turned out to
be yet another lousy day for Indian equity markets, with the Sensex and the
Nifty closing lower by around 100 and 25 points, respectively. Key indices made
a positive start of the day, as Engineering exporters' apex body Engineering
Export Promotion Council of India (EEPC) urged the Reserve Bank of India (RBI)
to facilitate easy and cheaper bank loans mainly for the Micro, Small, and
Medium Enterprises (MSMEs). EEPC also recommended that the banks should not ask
for external credit rating as they are doing internal rating and banks be
advised not to charge loan application processing and credit limit renewal fee.
Sentiments were also optimistic with Corporate Affairs Secretary Injeti
Srinivas' statement that the corporate affairs ministry maintained a fairly
reliable database that is not a black box. He emphasized that it is up to
statistical authorities to decide on which data is representative for GDP
calculation. However, markets soon turned volatile to settle the day in red
terrain, amid reports that India inflation likely crept up slightly to a
six-month high in April, driven mainly by food prices, although holding below
the Reserve Bank of India's medium-term target of 4 percent for the ninth
straight month. Market participants also got worried, as the International
Monetary Fund (IMF) warned that trade tensions and the exchange of tariffs
between the United States and China pose a threat to the global economy. Some
worries also came with the Association of Mutual Funds in India's (AMFI) data
report stating that net inflows into equity mutual funds plunged 61 per cent to
Rs 4,609 crore in April compared to the previous month, as volatility in stock
markets and uncertainty over the outcome of general elections impacted investor
sentiments. In March, net inflows into equity funds stood at Rs 11,756 crore.
Finally, the BSE Sensex slipped 95.92 points or 0.26% to 37,462.99, while the
CNX Nifty was down by 22.90 points or 0.20% to 11,278.90.
The US markets ended higher on
Friday after key negotiators cast a positive glow on trade talks. US Secretary
of Treasury Steven Mnuchin indicated that bilateral talks were constructive
even though an agreement was not reached. Meanwhile, President Donald Trump
said conversations with China over trade will continue and his relationship
with President Xi Jinping remains strong. However, the US hiked the tariff on
$250 billion worth of Chinese goods from 10 percent to 25 percent after the US
and China failed to reach a trade deal. The US increased tariffs as of 12:01
Eastern time Friday, with Beijing vowing to retaliate. Additionally, Trump
noted that the process has begun to place tariffs on the remaining $325 billion
worth of Chinese imports. On the economic front, Consumer prices in the US
increased by slightly less than anticipated in the month April, according to a
report released by the Labor Department. The Labor Department said its consumer
price index rose by 0.3 percent in April after climbing by 0.4 percent in
March. Street had been expecting another 0.4 percent increase. Energy prices
showed another substantial increase during the month, surging up by 2.9 percent
in April after jumping by 3.5 percent in March. A 5.7 percent spike in gasoline
prices account for over two-thirds of the increase by the headline index.
Excluding food and energy prices, core consumer prices inched up by 0.1 percent
for third consecutive month compared to economist estimates for a 0.2 percent
uptick. Higher prices for shelter, medical care, education, and new vehicles
more than offset significant decreases in prices for used cars and trucks and
apparel. Compared to the same month a year ago, consumer prices in April were
up by 2.0 percent, reflecting a modest acceleration from the 1.9 percent growth
in March. The annual rate of growth in core consumer prices also crept up to
2.1 percent in April from 2.0 percent in the previous month. Dow Jones
Industrial Average surged 114.01 points or 0.44 percent to 25942.37, Nasdaq
gained 6.35 points or 0.08 percent to 7916.94 and S&P 500 was up by 10.68
points or 0.37 percent to 2881.40.
Crude oil futures ended
marginally lower on Friday as escalation in the trade war has put a return in
global growth worries, which would translate to softer crude demand. The Trump
administration early Friday increased tariffs on $200 billion in Chinese
imports, and Beijing has vowed to retaliate. US and Chinese officials continued
negotiations Friday in Washington but did not produce a deal. However, Brent
crude ended higher as traders continued to watch growing tensions between the
US and Iran, which could disrupt Middle East output and drive oil prices
higher. Benchmark crude oil futures for June dropped 4 cents or 0.1 percent to
settle at $61.66 a barrel on the New York Mercantile Exchange. However, July
Brent crude gained 23 cents or 0.3 percent to settle at $70.62 a barrel on
London's Intercontinental Exchange.
Snapping two days depreciating streak, Indian rupee ended
marginally higher against dollar on Friday, as bankers and exporters took to
selling of American currency. Traders took note of Corporate Affairs Secretary
Injeti Srinivas' statement that the corporate affairs ministry maintained a
fairly reliable database that is not a black box. He emphasized that it is up
to statistical authorities to decide on which data is representative for GDP
calculation. However, most of the gains were trimmed as anxiety remained among
the traders ahead of index of industrial production (IIP) data for March
scheduled to be released today. On the global front, dollar was steady against
the safe-haven Japanese yen on Friday, taking in stride the hike in U.S.
tariffs on Chinese goods that went into effect and awaiting resumption of talks
between top officials of the world's two largest economies. Finally, the rupee
ended at 69.92, 2 paise stronger from its previous close of 69.94 on Thursday.
The FIIs as per Friday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 5110.71 crore against gross selling of Rs 5660.11 crore, while
in the debt segment, the gross purchase was of Rs 2522.82 crore with gross
sales of Rs 2637.13 crore. Besides, in the hybrid segment, the gross buying was
of Rs 12.15 crore against gross selling of Rs 11.61 crore.
The US markets ended higher on
Friday after Treasury Secretary Steven Mnuchin wrapped up a second day of trade
talks, calling the discussions constructive. Asian markets traded lower in
early deals on Monday on growing
uncertainty over whether the United States and China will be able to reach a
deal to end their trade war after Washington sharply hiked tariffs. The markets
registered eighth consecutive day fall on Friday, with Nifty ending below
11,300, as global markets remained under pressure. Today, the start of the
session is likely to be on negative side following subdued other Asian markets,
amid growing uncertainty over US-China trade talks. Investors will be looking
ahead to macroeconomic data such as Consumer Price Index (CPI) to be announced
after the market hours. Traders will
remain concern aster The Ministry of Statistics and Programme Implementation
data has showed that industrial production in volume terms declined in March
for the first time in 21 months - by 0.1 per cent - against a growth rate 0.1
per cent in the previous month as manufacturing continued to contract for the
second month in a row and mining growth was muted. The March numbers pulled
down the index of industrial production (IIP) to 3.6 per cent in 2018-19
against 4.4 per cent in the previous year. There will be some cautiousness too
with a recent technical study by the National Sample Survey Office (NSSO) for
July 2016 – June 2017 on the services sector enterprises has again raised
questions about India's national income data & quality of the country's
growth estimates. However, traders may take some support later in the day on
report that in an attempt to bring down the compliance burden on companies,
especially the small and medium enterprises (SMEs), the commerce ministry has
urged the ministry of corporate affairs (MCA) to explore avenues where firms
can opt for self-certifying their returns as well as clubbing all the returns
to be filed in a year into a single annual return. There will be some buzz in
the Steel stocks after the government has decided to set up a committee under
the Director General of Foreign Trade (DGFT) to look into availability of steel
at competitive prices for engineering goods exporters. The committee will
submit its report to steel and commerce ministries within two months. It will
suggest measures which will be a win-win situation for both steel producers and
engineering exporters. Also, the banking
stocks will keep buzzing with the Reserve Bank of India's (RBI) report that the
slowdown in bank deposit growth in the recent period alongside a revival of
credit demand raised concerns about a structural liquidity gap in the system,
possibly amplified by substitution effects of small savings and mutual funds on
bank deposits in the aftermath of demonetization.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,278.90
|
11,238.03
|
11,332.78
|
BSE Sensex
|
37,462.99
|
37,314.93
|
37,666.52
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
622.58
|
163.85
|
159.68
|
171.13
|
SBI
|
607.40
|
308.05
|
296.75
|
315.05
|
Tata Steel
|
372.41
|
486.80
|
468.65
|
515.35
|
Tata Motors
|
289.11
|
185.90
|
183.27
|
189.57
|
ICICI Bank
|
183.62
|
385.10
|
381.83
|
388.78
|
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